Unemployment Effects of Stay-at-Home Orders: Evidence from High-Frequency Claims Data

We use the high-frequency, decentralized implementation of stay-at-home (SAH) orders in the United States to disentangle the labor market effects of SAH orders from the general economic disruption wrought by the COVID-19 pandemic. We find that each week of SAH exposure increased a state's weekly initial unemployment insurance (UI) claims by 1.9% of its employment level relative to other states. A back-of-the-envelope calculation implies that of the 17 million UI claims between March 14 and April 4, only 4 million were attributable to SAH orders. We present a currency union model to provide conditions for mapping this estimate to aggregate employment losses.

Automated summary

This study uses high-frequency, decentralized implementation of stay-at-home orders in the United States to distinguish the labor market effects of these orders from the general economic disruption caused by the COVID-19 pandemic. The research finds that each week of stay-at-home exposure increases a state's weekly initial unemployment insurance claims by 1.9% of its employment level compared to other states. Only 4 million of the 17 million unemployment insurance claims between March 14 and April 4 were attributable to stay-at-home orders.